BW Group and Scorpio Group’s merger of their wind farm vessel companies should produce savings of €106m ($116m) per year.
The shipping group announced an all-share combination of Cadeler and Eneti worth $1.2bn on Friday.
“Significant” annual synergies will consist of corporate and financing savings of €18m, operational synergies of €37m and another €51m through improved utilisation of the combined fleets, the two sides said.
The merged fleet will consist of 10 modern installation vessels, if three non-core ships are sold.
“While the cost synergies are expected to be frontloaded, the targeted utilisation synergies are expected to be generated as the newbuilds enter into operation,” the companies said.
Cadeler will increase available debt financing facilities to ease the merger.
This will include money for general corporate purposes and working capital.
The Oslo-listed company will obtain a new commitment to refinance its long-term debt obligations for the combined fleet “at attractive terms”, the statement said.
Cadeler’s commercial strategy provides a degree of revenue certainty until the end of 2027.
Scorpio’s Eneti has more open days and can benefit from high tender activity and a growing market.
Cadeler shareholders will own 60% of the new entity, with Eneti investors having the rest.
Cheaper than organic growth
The combined company prices the resulting fleet expansion at a “meaningful discount to equivalent organic growth” from additional newbuilding orders and will generate accretive cash flows.
Listings of the companies on the Oslo Stock Exchange (OSE) and New York Stock Exchange (NYSE) are being maintained.
“As a result of a greater market capitalisation and dual listing on OSE and NYSE, the combined company expects to be well-positioned for increased investor attention, enhanced trading liquidity, inclusion in new stock indices and improved research coverage to the benefit of all shareholders,” they said.
Mikkel Gleerup, Cadeler’s Copenhagen-based chief executive, will run the combined company, with Peter Brogaard Hansen staying on as chief financial officer.
The board will consist of six directors, four of which will come from Cadeler.
Eneti chief executive Emanuele Lauro will join the board as well, while BW Group principal Andreas Sohmen-Pao will remain as chairman.
Two board members leaving
Cadeler directors Connie Hedegaard and David Cogman have offered to step down with immediate effect.
A significant presence will be kept in the UK through Eneti’s Seajacks International unit.
Based on Cadeler’s share price of NOK 47.68 per share on 15 June, each Eneti share is being valued at $15.44 and the company itself at $597m.
If Cadeler reaches 85.01% control of Eneti’s stock, it intends to initiate a squeeze-out process of all other shareholders.
Cadeler investors have to vote two-thirds in favour of a tie-up.
The offer is scheduled to begin in the third or fourth quarter, and the deal should close before the end of the year.
Cadeler said it has secured several new contracts over the past 12 months and ordered two new F-class installation ships.
Its contract backlog is €1.4bn, of which €1.1bn is firm.
Ebitda for 2023 is forecast in the €32m to €42m range.
As of 31 March 2023, Cadeler had a liquidity position of €49m, with €14m in cash, debt of €115m and remaining capital expenditure for its four newbuildings and a crane upgrade of €984m.
